Revised Azerbaijan budget to be based on $30 oil

20.01.2016 10:26

Azerbaijan's revised budget will be based on an oil price of $30 a barrel, the country's central bank chief said on Tuesday, as the former Soviet country struggles to stave off a currency crisis.

Oil-rich Azerbaijan has been hit hard by the collapse in global oil prices to multi-year lows as energy sales account for 75 percent of government revenue.

It has been forced into devaluing its currency and has burnt through over half of its official reserves.

"After revision the budget will be based on an oil price of $30 per barrel," the central bank's Elman Rustamov told state television. Azerbaijan's 2016 state budget is currently based on an oil price of $50 per barrel.

The Azeri manat has lost about a third of its value against the dollar in the past month and central bank reserves now stand at about $5 billion.

Azeri Finance Minister Samir Sharifov said last week that the state budget would be amended and spending cut in response to the crisis.

He said Azerbaijan took in 11.6 percent less in budget revenue than it had expected last year because of the decline in oil prices.

Economic growth slowed to 1 percent last year from 2.8 percent in 2014, well below official forecasts.

The 2016 budget currently sees total government revenues of 14.6 billion manats ($9.1 billion), down from 19.4 billion manats in 2015. Spending of 16.3 billion manats is forecast, down from 21.1 billion manats last year.

(Reuters)

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